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anticipated sales for goodstone tire company were 38 000 passenger car tires and 14 647743

Anticipated sales for Goodstone Tire Company were 38,000 passenger car tires and 14,000 truck tires. There were no anticipated beginning finished goods inventories for either product. The planned ending finished goods inventories were 2,750 units for each product. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

Rubber

30 lbs. per unit

65 lbs. per unit

Steel belts

4 lbs. per unit

9 lbs. per unit

The purchase prices of rubber and steel are $2.90 and $3.50 per pound, respectively. The desired ending inventories of rubber and steel belts are 45,000 and 9,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 72,000 and 6,000 pounds, respectively.

The following direct materials purchases budget was prepared for Goodstone Tire Company:

Goodstone Tire Company

 

 

 

Direct Materials Purchases Budget

 

 

 

For the Year Ending December 31, 2008

 

 

 

 

Rubber

Steel Belts

Total

Units required for production:

 

 

 

Passenger tires

1,140,0001 lbs.

152,0003 lbs.

 

Truck tires

910,0002

126,0004

 

Total

2,050,000 lbs.

278,000 lbs.

 

Unit price

_ $2.90

_ $3.50

$6,918,000

Total direct materials purchases

$5,945,000

$973,000

 

 

1. 38,000 tires × 30 lbs. = 1,140,000 lbs.

2. 14,000 tires ×65 lbs. = 910,000 lbs.

3. 38,000 tires × 4 lbs. = 152,000 lbs.

4. 14,000 tires ×9 lbs. = 126,000 lbs.

Correct the direct materials purchases budget for Goodstone Tire Company.

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